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1974 Memorandum on the Allocation of the Federal Tax Burden by Standard Metropolitan Statistical Area (SMSA) 1 (1974)

handle is hein.tera/malfthouts0004 and id is 1 raw text is: MEMORANDUM ON THE ALLOCATION OF THE FEDERAL TAX BURDEN BY STANDARD METROPOLITAN STATISTICAL AREA (SMSA) Fiscal Year 1974 This memorandum presents estimates of Federal tax burdens in 123 of the nation's largest SMSA's, on a basis comparable to the state estimates which the Tax Foundation has prepared for many years. The tax collections data published by official government agencies are not designed to reflect the geographic origin of Federal taxes, in terms of the ultimate incidence or burden. Special estimating techniques are required to ascertain the taxes actually borne by the residents of each state, or SMSA, as distinct from the places where the tax payments are initially made. For example, Treasury Department figures show the bulk of Federal tobacco taxes collected in the few major tobacco-producing states, while the burden of these taxes rests on consumers of tobacco products in all states. The bases used by the Tax Foundation for estimating the tax burden in SMSA's;together with the amounts of tax collected in 1974, appear in Table 1. Estimates of the Federal tax burden, both total and per capita, appear in Table 2, which also shows the percentage of the total Federal tax burden falling in each of the 123 SMSA's. Two sets of data are presented, one for taxes which go into Federal funds (excluding trust fund taxes) and the other for total taxes (includ- ing trust fund taxes). The total tax burden is consistent with the official unified Federal budget concept introduced with the 1969 budget presentation. The 123 SMSA's included in the study together account for about 86 per- cent of the population and 88 percent of the personal income of all SMSA's and for approximately 63 percent of the population and 68 percent of the personal income of the entire nation. The tax burden estimates are for fiscal year 1974, the latest for which applicable base data are available. In that year per capita Federal taxes for the nation as a whole averaged $1,213 ($1,337 in the 123 SMSA's covered here.) In fiscal 1976 per capita Federal taxes nationwide are estimated at $1,347, about 11 percent higher than in 1974. Therefore, on the average, the per capita tax burdens shown in Table 2 should be increased accordingly to obtain an estimate of current burdens. Estimates of the distribution of the Federal tax burden by state for 1975 are available in Tax Foundation's Memorandum of the Allocation of the Federal Tax Burden and Federal Grants-in-Aid by State, February 5, 1975. Frther explanation of the formula by which both state and SMSA tax burden estimates are prepared -- a well as its derivation, uses and limitations -- is con- tained in Research Aid No. 5, Federal Tax Burdens in States and Metropolitan Areas, 1974. Copies of this 36-page report are available from the Foundation at $1.50 each. Tax Foundation, Inc. Room 1515, 50 Rockefeller Plaza New York, New York 10020 October 15, 1975

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